24 February 2017

Grounding Narrowly Averted Off Norway:


On Wednesday morning, the 40,000 dwt barge carrier Eide Carrier (AIS reporting name Tide Carrier) came within 300 feet of going aground off Jæren, Norway.

Officials with the Joint Rescue Coordination Center – Southern Norway said that the vessel lost power at about 1045 hours Wednesday and deployed an anchor to hold herself steady. She regained power and weighed anchor, but lost power again and redeployed ground tackle to keep from drifting onto the beach.

As of Wednesday night, the Carrier was without propulsion but stable, with two anchors to hold her steady and two tugs made up and standing by. Three coast guard vessels were also stationed in the vicinity if needed. The JRCC intends to tow the Carrier away from shore after first light on Thursday.

One of the vessel's crewmembers was evacuated by helicopter at 1400 hours after he suffered a shoulder injury, and the JRCC initially reported that the master refused to evacuate the rest of the crew. Officials said in an update late Wednesday that SAR teams completed the helivac of four nonessential crewmembers. Two pilots and two tug company employees were brought on board to assist with the operation.

Until recently, the Carrier was flagged in Panama, and her Equasis record still reflects her previous registry. She is now flagged in Comoros, which NGO Shipbreaking Platform has identified as a popular flag state for end-of-life vessels on final voyages. ecords maintained by DNV GL show that the Carrier's classification was withdrawn last Tuesday. It is unclear whether she had obtained class certification from another society by the time she sailed.

Source: maritime executive. 22 February 2017

23 February 2017

'Ship recycling contributing greatly to economy'

'Ship recycling contributing greatly to economy'

Ship recycling is contributing significantly to the national economy as the sector is supplying raw material to the steel and re-rolling mills, says the industries minister.

 “As a labour intensive industry, ship recycling is contributing significantly to the national economy by creating jobs and increasing earnings,” Amir Hossain Amu said while speaking at the closing session of a workshop in Dhaka on Wednesday.

The industries ministry organised the workshop titles 'Safe and Environmentally Sound Ship Recycling/SENSREC' with additional secretary Begum Parag in the chair.

Joint secretary Begum Yasmin Sultana, Norwegian ambassador in Dhaka Sidsel Bleken and Dr Stefan Micallef of International Maritime Organisation also spoke on the occasion.

The industries minister said the government has already taken steps to ensure a safe working place for ship recycling industry, according to BSS.

Source: the financial express. 22 February 2017

22 February 2017

Demolition In 2016: No Break For The Shipbreakers!

Demolition activity remained particularly firm in 2016 amidst very challenging shipping markets, and reached historically high levels in some sectors. This could well be beneficial to the industry, with increased scrapping helping to ease the oversupply of ships in certain markets. This month Shipbuilding Focus takes a look at demolition activity by breaker country.

Successful Scrapping Season
2016 was the third highest year on record in terms of tonnage demolished, with a reported 933 ships of a combined 44.4m dwt scrapped. This was a year-on-year increase of 14% and equivalent to 2% of the start 2016 world fleet in dwt terms. Bulker and containership recycling activity was very strong in 2016 and accounted for 65% and 18% of total demolition respectively in dwt terms. The 0.7m TEU of boxships scrapped was 48% higher than the previous peak in 2013, while the 28.9m dwt of bulkers scrapped in 2016 was the second highest yearly total on record. Demolition activity reached firm levels despite continued downward pressure on steel prices from cheap Chinese steel exports. The Indian Sub-Continent (ISC) guideline scrap price for a Handysize bulker stood at $290/ldt at the end of 2016, 28% lower than the end of 2012, when total scrapping peaked.

All Eyes On The ISC
The proportion of tonnage sold for scrap to ISC breakers rose to 79% in 2016, the largest share in the past decade. ISC breaking yards recycled 656 vessels of a combined 40.0m dwt in 2016. Indian breakers experienced a resurgence after a comparatively slow 2015, with 340 ships of a combined 12.5m dwt recycled in 2016. This led their share of total demolition to rise from 20% in 2015 to 28% in 2016 in dwt terms. Bangladeshi breakers saw their share of world demolition decrease from 35% to 31% over the same period. However in dwt terms they still represented the largest share of demolition activity, scrapping 199 vessels of a combined 13.6m dwt in 2016. Recycling volumes at Pakistani breaking yards were steady year-on-year in 2016, with 117 vessels of a combined 8.9m dwt recycled. However, a number of fatal incidents at yards towards the end of the year caused temporary closures.

Sluggish Sino Scrapping
Chinese breakers recycled 111 ships of a combined 4.9m dwt in 2016, 11% of the world total and a year-on-year decrease of 25% in dwt terms. ‘Green’ recycling facilities in China have benefited from the domestic scrap subsidy introduced in 2013, with domestic owners accounting for 87% of tonnage recycled at Chinese yards. However, domestic scrapping fell 31% year-on-year in 2016 to 4.0m dwt. Turkey, another location for ‘green’ ship recycling, scrapped the most vessels of any other nation in 2016, 84 ships totalling 0.9m dwt (2% of global demolition).

Overall, 2016 was a busy year for breaking yards. Indian breakers regained market share and the Chinese lost share as domestic demand fell. Looking ahead, increased pressure to ensure safer and greener ship recycling may have a future impact on the breaker landscape. However, with around 40m dwt currently projected for demolition in 2017, global recycling is expected to remain at elevated levels.

Source: hellenic shipping news. 2o February 2017

Surging Steel Price Boosts Scrap Value of Redundant Containerships

A sharp increase in steel prices has prompted a new wave of vessel scrapping, bringing the supply-demand ratio in container shipping further into balance.

A Maersk Line containership seen alongside other ships a Hong Kong Convention-approved ship recycling facility in Alang, India. Photo credit: Maersk 

According to the latest report from London shipbroker Braemar ACM, containership scrapping this year has already reached 56, amounting to 185,500 teu. This compares with 16 ships (45,000 teu) in the same period of 2016.

Moreover, the delivery of newbuild tonnage has slowed considerably, with only 18 vessels, totalling 91,500 teu, having been delivered so far this year.

Over 2016, there were 189 demolitions (658,000 teu), according to Braemar – a new record for the container industry.

The latest driving force is twofold: plenty of surplus tonnage, particularly in a panamax sector the industry would do well be get rid of, and steel prices have firmed significantly since the low point of 2016.

By 6 February, the idle containership fleet had swelled to 342 ships (1.32m teu), according to Alphaliner data, with liner voyages blanked and ad-hoc demand disappearing during the Chinese new year holiday.

This included 47 classic panamax vessels seeking employment in a charter market where daily hire rates have collapsed to only $4,250-$5,000 – below operating cost.

Of these vessels, Alphaliner notes, 30 are currently hot or cold lay-up, mainly at anchorages in South-east Asia, and their owners may now opt to cash in on an increased demand for steel scrap.

Braemar reports that the demolition market “remains firm” and had heard of one panamax vessel being negotiated at “excess $330/LDT basis as is Singapore”.

Steel commodity prices fell to an all-time low of $90 per tonne in March last year, before bouncing back in June to around $300 per tonne and remaining at that level for the rest of 2016.

Analysts are forecasting that steel prices could rise above $400 per tonne this year, and even higher in 2018, as demand begins to exceed supply.

This is a direct consequence of the world’s leading steel producer, China, reducing its production by around 20% by 2020, due to a depression in its construction activity linked to the nation’s economic slowdown.

Against this backdrop, the World Steel Association has predicted that demand globally will increase by 0.4% this year, including 5.9% growth in the US, thus resetting the supply-demand balance and pushing prices up.

Indeed, the increased price of steel has already had an impact on the container manufacturing industry, with market-leading lessor Textainer reporting last week that a steel price hike of some 80% in the past year was supporting new dry container prices of “above $2,000”.

The surge in steel prices is likely to also put an end to cheap ships if, and when, any new orders are negotiated, but the more immediate relevance is that with the scrapping option becoming more attractive to owners, the chronic over-tonnage that has blighted the charter market in the past few years could be over rather sooner than anticipated.

Source: g captain. 21 February 2017

Container shipping faces critical moment after years of losses:

Sector shows signs of revival after deals and new sector alliances shake up market

At first glance, it is not obvious watching the cargo moving on and off the Leverkusen Express at the Port of Southampton that the container shipping industry has been contending with the biggest financial crunch in its 60-year history.

Cranes lift boxes over the towering sides of the 367m long vessel, just as they did before a glut of ships and a slowdown in global trade sent freight rates tumbling.

But on a closer look, there are signs of financial stress on the Southampton quayside. The decks of containers on the Leverkusen Express, operated by Hapag-Lloyd, are notable for being speckled with the colours of at least five other shipping companies, highlighting intense efforts to ensure that the vessel is filled to capacity. In the past, ship operators used to only put their own containers on their vessels, plus maybe those of one or two partners.

Operators have of late engaged in increased co-operation to fill their ships because that is the only way they will make money out of the giant vessels.

Much of the container shipping industry has been running up losses for years, but there are good reasons — including this enhanced collaboration between companies — to think that the sector has reached a critical moment in its battle to secure a course to sustainable profits.

A recent wave of deals is reducing the number of lines, while South Korea’s Hanjin Shipping last year became the first big container ship operator to enter bankruptcy since 1986.

Some executives think that the shake-up, which involves almost all the top 15 lines in mergers and new industry alliances, has stopped the decline in freight rates. According to Drewry Shipping Consultants, average revenue per 40-foot container recovered to a profitable $1,645 in December, from a lossmaking low of $1,113 in April.

Yet other sector observers believe that the industry’s longstanding issue of excessive numbers of container ships chasing inadequate volumes of cargo will reassert itself.

The current changes, they say, also pose risks. In the worst-case scenario, manufacturers that put their goods on container ships could find billions of dollars worth of their products stuck at sea on a bankrupt operator’s vessels, as happened following Hanjin’s collapse.

Rolf Habben Jansen, chief executive of Germany’s Hapag-Lloyd, highlights high levels of ship scrapping last year as a reason to be optimistic. Maersk Line, which last week reported a net loss of $367m for 2016, also expects a strong recovery and predicts that it will record a profit of about $600m for 2017.

“I expect that the industry will be far better off in financial terms within the next 12 to 24 months,” says Mr Habben Jansen.

But Lars Jensen, chief executive of Sea Intelligence Consulting, points to a continuing imbalance between demand to move cargo and the supply of ships.

Shipyards are due this year to deliver large numbers of huge vessels, which could put fresh downward pressure on freight rates, and Mr Jensen says: “We shouldn’t lose sight of the fact that the global supply-demand balance is basically where it was 12 months ago, when the market collapsed. Despite the record levels of [vessel] scrapping, that hasn’t improved.”

The key question is whether a restructured container ship industry — as the new mergers and alliances take effect — can exercise discipline on freight rates and restraint on vessel orders.

The deals are vital to fill new vessels capable of carrying as many as 20,000 20-foot containers. In the biggest of the current transactions, Hapag-Lloyd is acquiring the container shipping operations of UASC, while Maersk Line is buying Hamburg Süd.

Three of the four alliances that have dominated the industry will also disappear on March 31.

They will be replaced the next day by two new groupings — The Alliance of five container ship operators led by Hapag-Lloyd, and the Ocean Alliance of four companies spearheaded by France’s CMA CGM. The 2M alliance of Maersk Line and Mediterranean Shipping Company may also change if Korea’s Hyundai succeeds in its attempt to join.

A senior executive at one shipping line expresses confidence that the overhaul of the market should help to prevent excess capacity and problems on freight rates. Lines will have to seek approval from other members of their alliances before buying new vessels, which should put a brake on orders.

“From that point of view, it’s contributing to some form of stability,” says the executive. It is also positive, she adds, that consolidation and Hanjin’s bankruptcy have removed from the market some struggling lines that were “pricing quite aggressively” with their freight rates.

Mr Habben Jansen agrees that the market is functioning more rationally. “We already see the first improvements,” he says.

Yet Simon Heaney, analyst at Drewry, is cautious. He highlights how a new Korean shipping company called SM Line has taken over some of Hanjin’s vessels and might drive down freight rates on trans-Pacific routes.

“When you’re an underdog, you have to buy your way into a market,” Mr Heaney says.

Ron Widdows, a consultant and former chief executive of Neptune Orient Lines, which was bought last year by CMA CGM, has deeper concerns.

He says that shipping lines might cut freight rates to pursue market share for their new alliances, or order ships to beef up services. The record numbers of ships currently lying idle could be put back into operation, driving rates down again, he adds.

Mr Widdows also fears that the market overhaul will lead to instability. He points out that in 2005 a single deal — Maersk’s €2.3bn takeover of P&O Nedlloyd — caused considerable disruption.

This time around, as a battered industry prepares for multiple transactions simultaneously, the potential for disorder could be far greater.

“Imagine what that does in terms of the instability and continuing volatility of the environment,” Mr Widdows says.

Source: financial times.